Global In-House Centers Mitigating Risks. Enhancing Reputation. Optimizing Returns.

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Global In-House Centers Mitigating Risks. Enhancing Reputation. Optimizing Returns.

Global in-house centers in India from cost drivers to business enablers 1990s 2000 onwards 2010 onwards The future Global in-house centers (GICs) were first established in India during the late 1990s with a focus on cost reduction by utilizing inexpensive technical resources and relatively affordable real estate. In the next decade, GICs in India expanded their horizons and evolved from providing back-end support to becoming multifunctional centers of excellence. By 2010, almost 700 GICs had been established in India after rapid expansion, and a paradigm shift occurred with GICs becoming value creators instead of cost centers, providing value-added services through innovation in service delivery and management with a clear vision of becoming centers of excellence for better productivity and efficiency. India currently has over 1,000 GICs operating across numerous sectors 1, including IT and ITeS, engineering and software development, BFSI, telecom, BPO services, etc., with growing concentration in the aerospace, healthcare, pharma, and biotech industries. In the IT and ITeS sector alone, GICs in India account for US$19 billion in export revenues (over 20% of the industry export revenue), and employ over 7,00,000 people. The future of GICs in India is very promising. The shared service center tag is all set to change as GICs become strategic centers with better leadership from the parent organizations and global transparent governance. At times, the growth in GICs may have been accompanied by rising exposure to fraud, misconduct, and non-compliance, along with operational challenges such as difficulty in retaining skilled employees, productivity and quality issues, rising costs and augmentation of robotics, but GICs are working to overcome the challenges and are likely to continue growing rapidly. 1 Sources: https://www2.deloitte.com/content/dam/deloitte/us/documents/process-and-operations/us-sdt-taking-global-in-house.pdf, http://www.nasscom.in/ global-in-house-centres 02

A complex ecosystem consisting of multiple stakeholders poses diverse challenges Customers Regulatory Bodies Parent Company / Parent GIC International Regulatory/ other Compliances driven through Parent Company Business Support Global In-house Centers Service Delivery Enabling Operations Local Regulatory/ Other Compliances SLA/ KPI Compliance, Risk & Control Mechanism, Cost optimization Third-Party Vendors ITES, Infrastructure, Admin, HR Key Challenges Third Party Vendor Intellectual Proprietary Violations Regulatory Compliance Local & International Low Net Promoter Score (NPS) / C-SAT Score Site Acquisition and Expansion Data Integrity and Security High Costs of Inadequate Controls Talent Acquisition and 03

Vulnerabilities affect the GIC value chain in varying degrees Value Chain Competency Center Process Center Strategic Center Business Support Service Delivery Enabling Operations Incubate Organization Design Compensation and Benefits Demand Resource Business Site Selection Talent Strategy Training and Development Metrics/SLAs Innovation Physical Infrastructure IT Infrastructure Life Cycle Operationalize Succession Leadership Development Quality Process Excellence/ Automation Vendor Finance/Cost /Tax Workforce Recruitment and Retention Enabling Technology Reporting and Analytics Risk Control Governance Optimize Career Organization Culture CRM Continuous Improvement IT security Business Intelligence and Analytics High Risk Medium Risk 04

We have tailored our services portfolio to address the critical challenges facing GICs in India Governance Code of conduct and anti-fraud policies Whistle-blower hotline management Fraud incidence response, including cyber incidents Ethics trainings and certifications Fraud risk assessment and management Contract Vendor contract management Customer contract compliance review Dispute advisory Fraud Analytics Vendor risk dashboard, vendor spend analytics Facility management analytics, recruitment analytics Goodwill gesture and refund analytics Anti-counterfeit analytics (FMCG, pharmaceuticals) Network analytics (telecom) Regulatory Advisory International and national regulations policy, training and investigations Anti-bribery and anti-corruption advisory (FCPA/UKBA, etc.) Anti-money laundering advisory Anti-sexual harassment program management Expansion Enablement CapEx spend analysis Campus program monitor Information dashboard 05

Contacts Parag Saigaonkar Partner Consulting - S&O: Business Model Transformation +91 22 6122 8000 psaigaonkar@deloitte.com Rohit Mahajan APAC Leader Partner & Head, Forensic Financial Advisory, +91 22 6185 5180 rmahajan@deloitte.com Rajat Vig Partner +91 124 679 2905 rajatvig@deloitte.com Arjun Rajagopalan Director +91 124 679 2000 rarjun@deloitte.com Rahul Kalia Director +91 22 6185 5478 rkalia@deloitte.com Aakash Sharma Senior Manager +91 124 679 2000 sharmaaakaash@deloitte.com Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. This material and the information contained herein prepared by Deloitte Touche Tohmatsu India LLP (DTTILLP) is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s) or a substitute to obtaining professional services or advice. This material may contain information sourced from publicly available information or sources that DTTILLP has no reasons to believe are not reliable. DTTILLP does not independently verify any such sources and is not responsible for any loss whatsoever caused due to reliance placed on information sourced from such sources. None of DTTILLP, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network ) is, by means of this material, rendering professional advice or services (including, without limitation, any investment advice). This material or information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person by reason of use of or reliance on this material. Deloitte Touche Tohmatsu India Private Limited (U74140MH199 5PTC093339) a private company limited by shares was converted into Deloitte Touche Tohmatsu India LLP, a limited liability partnership (LLP Identification No. AAE- 8458) with effect from October 1, 2015. 2017 Deloitte Touche Tohmatsu India LLP. Member of Deloitte Touche Tohmatsu Limited